Case Study Of Lehman Brothers

1836 Words8 Pages
Lehman brothers was the fourth-largest U.S. investment bank with $639 billion in assets and $619 billion in debt. With almost 25,000 employees worldwide Lehman's bankruptcy filing was the largest in history, they’re failure also made it the largest victim of the U.S subprime mortgage induced financial crisis that metastasized through the global financial markets in 2008. Lehman's collapse was an influential incident that greatly intensified the 2008 crisis and contributed to the corrosion of close to $10 trillion in market capitalization from global equity markets in October 2008, the most prevalent monthly decline on record at the time. This case study will revolve around the numerous incidents that were the main attributors to the Lehman disintegration; The underlying risks that extended through the entire bank’s system, and therefore, led to the manifestation of a great…show more content…
The case will identify a variety of major risks that afterwards led to the Lehman failure. The case will also propose several mechanisms that could be implemented to treat and remedy those identified risks, if these mechanisms were deployed accurately, it would have saved the bank several billion dollars in incurred losses and consequently, bankruptcy that severely exposed the U.S economy from the sustained losses that were a direct result of the inadequate compliance with various banking regulations imposed by the Basel accords “Lehman's bankruptcy filing on Sept. 15, 2008 -- the largest Chapter 11 filing in financial history -- capped a 95% drop in the firm's stock price and sparked up a crisis of confidence that pitched financial markets worldwide into turmoil, igniting the worst financial crisis since the Great
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